5 major trends affecting the enterprise software industry

Mumbai: Business intelligence (BI), collaboration, content management, social software and supply chain management will be the top application software growth segments in 2011. The five long-term, overarching, and interdependent trends affecting the enterprise software markets are globalization, implementation, modernization, socialization and verticalization, reveals the research firm Gartner.

The focus this year will be on modernizing packaged application systems, enabling diverse user access through software as a service (SaaS) and cloud services, and driving revenue and innovation. Worldwide enterprise software revenue is forecasted to surpass $253.7 billion in 2011, a 7.5 percent increase from 2010 revenue of $235.9 billion.

"The focus in the enterprise software industry is on upgrading of build-run-manage technologies to improve agility, establishing cloud-computing infrastructure services and results-reporting transparency," said Tom Eid, Research Vice President at Gartner.

"For 2011 through 2015, the highest instances of software market growth will align to the business requirements of attracting and retaining customers, enhancing business processes, improving collaboration and social networking, managing content of all types, reporting of performance and results transparency, and workforce effectiveness and flexibility," Eid said.

The market-disrupting influences of SaaS, cloud-based services, open-source software, consumerization and Web 2.0 technologies will expand, while developing countries, including Brazil, Russia, India and China (BRIC), will prove themselves to be pivotal innovation and growth engines.

The enterprise software marketplace continually undergoes technology and business model transitions that affect how buyers procure software, implement technology and conduct operations. Gartner has identified the five long-term, overarching, and interdependent trends affecting the enterprise software markets such as:
1. Globalization: This encompasses market consolidation and technology convergence trends, as well as the connected society, vendor mergers, and acquisitions. During this period of market disruption, highly fragmented software markets will become more structured and marked by an extensive reduction of vendors.

2. Implementation: How organizations procure and deliver software is being challenged with cloud-computing, platform as a service (PaaS) and SaaS, coupled with pervasive and mobile access. The demand for cloud-based solutions will continue throughout the next several years.

3. Modernization: Enterprises continue to migrate to open-source software (OSS) and SOA as older applications and systems become more costly to upgrade and maintain. Aligned with the modernization trend, automating business processes and streamlining workflows continue to gain traction. Enterprises are expecting to provide significant resources in 2011 to upgrade all types of systems and software, ranging from personal productivity tools, to build-run-manage infrastructure software, to user-driven applications. Virtualization is a key modernization factor.

4. Socialization: Use of social media and networking continues to gain traction. In the trend of socialization, which includes personalization, collaboration and content in the context of user-defined activities, unified communications and collaboration will see increased adoption in 2012, and context-aware and presence-based computing will gain more traction in 2013.

5. Verticalization: This trend involves a cycle of horizontal software applications becoming more customized and catered toward specific industries. In deploying new software technologies, it is common for vendors to initially provide generalized technology that, over time, can then give rise to more industry-specific and line-of-business features.